Purpose – The purpose of this paper is to investigate to what extent male and female PhDs choose academic vs non‐academic employment. Further, it analyses gender earnings differences in the academic and non‐academic labour markets. Design/methodology/approach – Rich Swedish cross‐sectional register data on the stock of PhDs in 2004 is used for investigating differences between male and female PhDs in earnings levels and in the choice of labour market (in academia or outside academia). Findings – No significant gender differences prevail for the probability of becoming academically employed. On average, women earn 16 per cent less than men, and the academically employed earn 26 per cent less than PhDs outside academia. In the non‐academic labour market, women earn approximately 25 per cent less than men, and this gender gap stays constant over time. Within academia, men and women start at similar earnings levels, but higher returns to graduate experience for men causes the gender earnings differences to increase over time to approximately 18 per cent by ten years after graduation. Practical implications – Provides background information relevant for efforts to make efficient use of female scientific human capital. Originality/value – The study is the first to investigate career‐choice and earnings of Swedish PhDs. Further, the study is the first to investigate both the academic and the non‐academic labour markets.